Adjusting to the Internet of Things

SAP product developers mimic Mike Tyson promoters without even knowing it

Published: Monday, August 17, 2015 - 11:51

If you don’t think the Internet of Things (IoT) matters, you’re wrong. If you don’t think the IoT is a big deal—a really big deal—you’re really wrong. Emerging technology that revolutionizes how information is shared and used disrupts many a well-entrenched business paradigm. Don’t think so? Ask former heavyweight boxing champ Mike Tyson about that.

I grew up watching “Iron” Mike Tyson dominate the heavyweight boxing division during the 1980s. With a professional record of 50 wins—44 by knockout—Tyson’s pugilistic skills are legendary. Tyson became the first heavyweight fighter in history to hold the WBA, WBC, and IBF titles simultaneously—and possibly the first fighter to be banned from professional boxing for biting off a piece of an opponent's ear. Tyson’s roller-coaster lifestyle is just as legendary as his knout-out power.

But oddly enough, it was a marketing technique used by Tyson’s former managers, Bill Cayton and Jimmy Jacobs, that really caught my attention.

Mike Tyson, heavyweight boxing champion 1986–1990

VHS: Not just for the living room

I also grew up watching the videotape format wars with VHS pitted against Betamax. By the time I finished my own military tour of duty in 1985, VHS had emerged as a clear winner. What does any of that have to do with IoT? The infant availability of VHS as a marketing tool has plenty to do with it. My tour of duty—not so much. Prior to VHS as a ubiquitous technology, boxing promoters were stuck between 20th-century fulfillment, a la pay-per-view, and 19th-century promotional tools such as radio, still photos, and reel-to-reel movie clips of their fighters—not to mention the front-loaded influence of the media.

“Press play is a very big part in a sense that if a promoter or manager knows how to use the press—to get the amount of ink and the timing of the ink—in such a way, that getting a title shot pays,” explains Michael Katz, sportswriter for the New York Daily News. “Because anybody can get a title shot if they’re willing to pay for it. The idea is to get the title shot so it pays you.”

Tyson’s managers determined that VHS might be a useful tool to squeeze some of that “ink” in a lucrative way.

“We decided the time was at hand for the marketing of Mike with a technique that had never been used before, simply because video cassettes were never really available to a manager before,” revealed Cayton. “We prepared cassettes of all of Mike’s fights and sent those cassettes, with a cover letter, to the top sports writers and television personalities throughout the country.” Ironically, these are quotes from a VHS tape that I myself purchased in the 1990s called “Mike Tyson’s Greatest Hits.”

As I write this, VHS seems about as quaint as Deep Purple on an eight-track tape. But back in the day, VHS was an emerging information-sharing technology that enabled even the dysfunctional Tyson dynasty to garner some $400 million. Cayton and Jacobs were shrewd enough to identify a disruptive technology and take advantage of it. Now it’s happening all over again with the IoT. Tyson, Cayton, and Jacobs will not be involved. Automakers, service vendors, and the software company SAP will be.

If VHS was such a disruptive technology in its day, we’ll have to invent a new adjective to describe the Internet of Things. Once again, a fledgling technology that rewrites how information is gathered and shared, but this time it wrangles vast amounts of data from limitless nodes at inconceivable speeds. Yes, IoT is a colossal phenomena and more than one company has decided that “the time is at hand for marketing products simply because those products were not available before the explosion of IoT.”

Yes, but what does IoT do?

Headquartered in Walldorf, Germany, SAP SE is a self-proclaimed “market leader in enterprise applications and software.” With locations in more than 130 countries, and 282,000 customers around the world, who am I to argue? In addition to being a mainstay in enterprisewide software solutions, SAP is also forging new trails within the swelling gravitational field of IoT. Two recent offerings from SAP showcase a savvy approach to synthesizing new information technology—IoT—and developing heretofore impossible services for consumers.

BILT mobile app
The BILT mobile app from SAP caters to consumers of various retail items (e.g., BBQs, fitness equipment, furniture labeled “some assembly required”). This app, released for general use in November 2014, provides interactive 3D, voice-guided assembly, and repair and installation instructions in an easy-to-use application for iOS and Android tablets and phones.

BILT is a free service to consumers. Once downloaded, a user can look up a product and instantly play an interactive tutorial of assembly instructions that walk the user through assembly, step by step, at his desired pace. The app also enables the consumer to capture and send product registration to the manufacturer, streamlining the warranty process, and retaining replacement part, repair, and warranty information all in one place.

“Consumer products companies and retailers understand that value is created every time you improve the customer experience,” says Pat Bakey, SAP’s global head of consumer industries. “SAP is committed to helping companies delight their customers by improving the experience wherever it takes place—in the store, online, and now at home assembling the product they purchased. BILT offers an opportunity to extend the relationship beyond the immediate transaction, helping ensure [that] the experience promised is the one received.”

By leveraging the connectivity between manufacturers and consumers, SAP has now positioned itself well in the business-to-consumer arena. The software giant also facilitates a smooth manufacturer-to-consumer relationship.

“SAP manages the process of inputting the product content from a manufacturer into the platform,” says Nathan Henderson, general manager of BILT at SAP. “Once the manufacturer content is in the BILT database, consumer usage analytics are provided to the manufacturer on a regular basis, and the manufacturer also has the ability to update and make changes to product instructions as needed. All this allows manufacturers to provide extended customer service long after the initial transaction.”

When asked about the challenges of developing a business-to-consumer product (as opposed to business-to-business), Henderson’s response was a neat, “Yes, BILT represents a new business model for SAP. However, the company has been supportive to expanding to new types of product innovation given its commitment to improving customer experience for business.”

The very connected car

Since at least 2011, automakers have offered entertainment systems with the ability to interface with a consumer’s smart device. That luxury was like the first fat drop of an unexpected downpour, and even though car buyers may not see it yet, everyone in the automotive industry is aware of the irrepressible rise of the connected car. As Mark Fields, president and CEO of Ford Motor Co., says, “Today’s car is a computer on wheels.” Considering Gartner Inc.’s assertion that “4.9 billion connected ‘things’ will be in use in 2015,” that makes for a very connected car indeed. What does that mean, though, other than being able to link your Samsung Galaxy to your Ford Galaxy? SAP is working on that, too.

“Every year, around $577 billion are spent by consumers in the United States on fueling, fast-food drive through, and parking—all activities involving a car,” says Timo Stelzer, vice president of products and innovation development at Global Technical Lead Connected Vehicles. “The automotive industry is currently not part of this market. SAP is building a business model where automotive companies can participate in these transactions—enabling them to monetize connected services. We already work with oil and gas companies, carmakers, and other related industries, and can bring them together in a business network.”

“A major trend we see is that automotive companies want to get into the connected services business,” says Stelzer. “This will open a large market for them and build an ongoing relationship with the consumer beyond the sale of the car. SAP will launch its Connected Vehicle Business Network toward the end of summer 2015. This will include connected parking, fueling, and food/quick-service restaurants.”

And this is just round one

I don’t think it’s a big stretch to predict the IoT will change our world as much as the PC or a smartphone. Even seemingly frivolous ideas like the smartwatch have far-reaching applications as connectivity becomes more ubiquitous in even the most mundane products. Connected cars are not only not going away, they’re opening a whole new world of possibilities. Even commercial industry will be redefined. Consider that GE has just launched its cloud-based service called Predix. Predix is a platform-as-a-service offering that handles big data and is tailored specifically for industrial organizations that use connected machinery, monitoring systems, and apparatus. Although electrical utilities’ smart meters are not quite passé, Pacific Gas and Electric Co. is already pushing its smart thermostat.

And hey, who knows? With the technological floodgates wide open and our reticence toward singularity on the ropes, maybe the self-driving concierge is just around the corner.

About The Author

Ryan E. Day

Ryan E. Day is Quality Digest’s project manager and senior editor for solution-based reporting, which brings together those seeking business improvement solutions and solution providers. Day has spent the last decade researching and interviewing top business leaders and continuous improvement experts at companies like Sakor, Ford, Merchandize Liquidators, Olympus, 3D Systems, Hexagon, Intertek, InfinityQS, Johnson Controls, FARO, and Eckel Industries. Most of his reporting is done with the help of his 20 lb tabby cat at his side.